UK businesses who treat their employees equally, regardless of race, reported up to 58 per cent higher income than their counterparts, according to a new report released by Henley Business School.
The new research highlighted that companies with targeted measures specifically aimed at supporting employees from ethnic minorities recorded better staff output and loyalty, as well as higher revenue.
Researchers from Henley Business School used 100 randomly selected FTSE 350 companies, stratified by market capitalisation and industry. They found that the average market cap of companies with targeted racial equity measures was £4.3bn higher than those without them.
The report, entitled ‘The Equity Effect’, also found that racial discrimination is still rife and black employees are the worst off, despite progress being made in some pockets of British business.
Black employees are more than twice as likely to experience racial discrimination compared to Asians and mixed ethnic minorities.
Discrimination in work allocation was highlighted as the leading form of discrimination by 41 per cent of ethnic minorities who participated. It was followed by verbal abuse and unfair application of work policies or rules. Just over a third of minority ethnic business leaders said they saw a lack of empathy as the most significant barrier.
The report found that white business leaders are significantly less likely to recognise discrimination in their workplace than their ethnic minority counterparts in leadership roles. The fact that 70 per cent of those surveyed for the report said their senior leadership were white, was highlighted by Henley Business School as a case in point.
Lead researcher, Dr Naeema Pasha, Director of Equity, Diversity and Inclusion at Henley Business School said, “
“Of course, we all want to say that racism has no place in business, education or society,” said Dr Naeema Pasha, Director of Equity, Diversity and Inclusion at Henley Business School and the lead researcher of the report.
“But the experience of the pandemic and social movements like Black Lives Matter have shown us that we need to shift our organisational, cultural thinking to ensure we work on racial equity – not just because it is a good thing or seen as worthy, but because it is valuable and essential to organisational success.”
Henley Business School conducted quantitative research with 1,005 employees and 505 business leaders and qualitative research with business leaders and research of publicly available sources.